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Industry Overview: Semiconductor and Electronics Industry

Philippines Consumer Electronics Industry has played an imperative and indispensable role in the development of  the country as it has grown substantially and strongly over the past decades. Country's economy is expected to grow around 5-6% in 2012 on the basis of its sound macroeconomic fundamentals such as low inflation, stable banking system and a balance of payments surplus.

The Semiconductor and Electronics Industry is the key driver of the Philippines economy for the past several years as it accounts for almost 50% of the country's total exports. Despite the economic downturn and the Eurozone crises, the Consumer Electronics Association has predicted that the global electronics market will exceed $1 trillion for the first time in 2012, with the increase in sales of Smartphones, tablets,LED TVs etc and an increased demand for electronic products from developing economies like China, India and Brazil.
 
The Electronics industry in the Philippines has attracted an investment of $4.49 billion in January and Febuary 2012, a 7% increase from the same period in 2011. Semiconductors which accounted for almost 72% of cumulative electronics sales, posted a 6.6% increase from $3.04 billion in 2011 to $3.24 billion in 2012. The Philippines accounts for about 10% of the world's semiconductor production, including mobile phone chips and microprocessors and investments in this industry have been growing for the past 2 years.
 
The Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) have disclosed that approximately 16.5 billion Pesos worth of investments from 42 new electronics companies were made from January to May 2012. They expect the industry to post a good recovery in the coming months despite a recent slowdown in the export of electronics in 2011 due to decrease in demand in the European markets on account of the Euro crises and a disruption in the supply chain due to the Japan Earthquake in 2011.
 
Many Foreign firms are still setting up their production base in the country to cater to the growing demand for electronic products in the Asian market. For instance, Canon Business Machine has recently made an investment worth 20 billion Pesos for its printer manufacturing facility. Murata plans to put in 350 million Pesos for the production of monolithic ceramic capacitors (MLCC) scheduled to commence in January 2013.
 
Toshiba Information Equipment Systems has recently invested 3.6-billion Pesos to increase their production capacity and the export resulting from the investment is expected to reach $1.327 billion in a year . They have also relocated some of their production operations from Thailand. Maxim Philippines Corporatation is investing 3.2 billion Pesos for the expansion of its testing operations for finished semiconductor kits. While Yazaki Torres, which makes wiring harness is investing a combined amount of 1.16 billion Pesos for expansion projects in Calamba and Batangas.Due to the importance of the electronics industry, the Philippine government is hoping to boost the semiconductor and electronics sector by taking some measures to improve the competency.  It is creating a testing centre for which the government has allocated US$ 7.2 million.
 
The future outlook of the domestic consumer electronics industry is positive with Business Monitor International (BMI) predicting that the Philippine consumer electronics market will grow at a compound annual growth rate (CAGR) of 7% to US$6.1bn by 2016. Due to the booming economy and increased consumer confidence, the electronics industry has a lot of potential to grow both domestically as well as in exports. Low wages and the availability of an adequately skilled workforce are also some of the driving factors for the growth of the electronics industry.
 
(Source: Insight Alpha)
 
 
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The Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI)